FPC’s Jenkins in call for longer-term bankers’ pay

BASING bankers’ rewards on return on equity (RoE) encourages short-term thinking and is in part to blame for the financial crisis, Robert Jenkins from the Bank of England’s financial policy committee (FPC) told a conference in Paris yesterday.

“RoE is a convenient target,” he said, but it has made “many bankers rich and loyal shareholders poor”.

It can be hit by increasing return, or decreasing equity, he explained.